LAUSR

1Center for International Forestry Research, Lima, Peru. 2University of Copenhagen, Copenhagen, Denmark. 3The Water Institute, University of Waterloo, Waterloo, Ontario, Canada. 4Vrije Universiteit Amsterdam, Amsterdam, the Netherlands. 5University of Osnabrück, Osnabrück, Germany. 6CIRAD, UPR Forêts et Sociétés, Montpellier, France. 7Montpellier University, Montpellier, France. 8Universidade Federal Fluminense, Niteroi, Brazil. 9Basque Centre for Climate Change, Leioa, Spain. 10Basque Foundation for Science, Ikerbasque, Spain. 11University of Waterloo, Waterloo, Ontario, Canada. 12Present address: European Forest Institute, Barcelona, Spain. ✉e-mail: [email protected] Wells et al.1 argue that our Analysis about the design and implementation of payments for environmental services (PES)2 is misguided in at least two respects. First, we supposedly framed our analysis on “economistic” design and implementation concerns, thus relegating broader social-ecological contexts and drivers, in particular local legitimacy (and related concerns of equity and fairness). Second, our claim that PES is being practiced in oversimplified ways would ignore that simplification of PES project design can be socially and scientifically justifiable, because it is then “easily understandable and seen as fair”. Our call for greater PES sophistication would thus seem to be misplaced. Albert Einstein is cited (or paraphrased) as saying: “Everything should be made as simple as possible, but no simpler”3. Simplicity is thus desirable, but it can also be overdone. One can err on either side in PES technical design, in its multidisciplinary framing (as alleged by Wells et al.) and, as we will argue, in analysing PES impacts. Let us address three aspects—technicality, equity and impacts—one by one. First, are we too technically focused on diversified payments, spatial targeting and enforced conditionality? For instance, is spatial targeting a superfluous perfectionist complexity that only jeopardizes legitimacy? Environmental services tend to distribute unevenly in space, as do the land-use changes threatening them2. PES budgets are usually too scant to enrol all landowners. Ignoring the geography of environmental services in participant selection may thus have dire implications. Poor spatial targeting is the single major cause of low cost-effectiveness in agri-environmental PES4,5. Conversely, introducing even basic (and thus inexpensive) spatial targeting can greatly boost a programme’s environmental returns6,7. The science here is particularly clear: spatial heterogeneities constitute major stumbling blocks for oversimplified PES initiatives, as they consequently protect the wrong pieces of land. Second, are we sacrificing equity concerns for economistic design sophistication in our research framing? Wells et al.1 are correct that equity often influences the success of PES. However, technically sound design and equity go hand in hand. Diversified payments can be justified by cost efficiency and fairness concerns alike: when landowner costs of service provision vary, equal payments can be perceived as inequitable; aligning payments with individual costs then enhances distributional fairness. Likewise, spatial targeting might also include explicit layers of welfare and equity criteria. Finally, enforcing conditionality concerns moral hazard and socio-psychology; it is about the basic fairness of the PES quid pro quo principle: receiving PES without complying with contract conditions is arguably unfair towards other PES participants. Our analytical framing is not economistic but interdisciplinary, integrating both social and fairness concerns. In our Analysis2, we focused on the three empirically best-supported design and implementation lessons, while recognizing that there are many other features to consider8. We also explicitly acknowledge the importance of fairness concerns in PES design and evaluation9. We appreciate that Wells et al.1 point to multiple interpretations of our results. For instance, we agree concerning conditionality that our historical sanctions indicator may be simplistic in some cases. Non-conditional incentives may still work as effective rewards, setting a good example for others. Yet non-environmental, political PES objectives driving landowner income support may erode the implementer’s interest in enforcing conditionality10. Behavioural economic considerations may also modify standard economic recommendations. Disentangling the history, political economy and governance behind PES adoption, design and implementation choices constitutes an exciting PES research frontier that will help us to better understand why theory and practice may diverge11. We welcome this broadening of the debate. Nevertheless, we strongly doubt that simpler solutions (such as flat payments or no targeting) would usually be more legitimate or equitable, as Wells et al.1 believe. And conversely, implementing environmental policies more equitably would rarely make them simpler: genuinely considering distributional, procedural and recognitional equity for public goods involving externalities will tend to make interventions more complex instead, requiring more, rather than less, PES sophistication. Third, we believe that Wells et al. gloss over the environmental impacts of PES. The drivers of effectiveness that they refer to from Huber-Stearns et al.12 are in fact case-specific factors thought to influence PES adoption. These discourses about the conditions under which PES would emerge say little about impacts: the measured degree of success these initiatives have had over time (for example, incremental environmental services delivered, or areas effectively conserved) compared with what would have happened without PES. It is these environmental impact evaluations that principally motivated us to write our Analysis. Empirical evidence from literature reviews points to often disappointing PES impact sizes2,13. This is a fundamental concern going far beyond any academic drive towards technical perfectionism. There is a well-justified fear that ill-designed environmental policies mean spending ‘money for nothing’14,15. And PES impact evaluations fairly consistently point to the lack of spatial targeting, diversified payment and Reply to: In defence of simplified PES designs